Amazon.com Inc. (AMZN) enters Monday under renewed pressure after a week that saw the stock decline 3.13%, closing at $264.14 on Friday. The drop came amid two significant developments: Berkshire Hathaway disclosed it had sold its entire Amazon stake as of March 31, and a proposed consumer class-action lawsuit was filed in federal court in Seattle alleging the company overcharged customers due to tariffs later ruled unlawful by the U.S. Supreme Court.
Despite the weekly decline, Amazon shares remain up 14.44% year-to-date, driven largely by optimism around its cloud computing division, Amazon Web Services (AWS). AWS posted first-quarter sales growth of 28% to $37.6 billion, with CEO Andy Jassy calling it the fastest growth in 15 quarters. Total net sales rose 17% to $181.5 billion, while operating income reached $23.9 billion.
However, the market's patience with high-growth tech names appears to be waning. The Nasdaq Composite fell 1.54% on Friday, snapping a six-week winning streak, as rising oil prices and Treasury yields prompted investors to rotate away from momentum-driven AI stocks. "There's a realization that the market had gotten way ahead of itself," said Kenny Polcari, chief market strategist at Slatestone Wealth, in comments to Reuters.
Berkshire's filing covering positions as of March 31 showed it exited smaller holdings including Amazon, UnitedHealth, Visa, and Mastercard, while more than tripling its investment in Alphabet (GOOGL), a direct cloud and advertising competitor. The move signals a shift in Warren Buffett's portfolio away from retail and toward digital advertising infrastructure.
Amazon's capital expenditure surged 76% year-over-year to $44.2 billion in the first quarter, as the company continues to invest heavily in data centers, chips, and AI infrastructure. The company is targeting $200 billion in AI-related spending by 2026. Wall Street is closely watching whether these investments will translate into stronger cash flow in coming quarters.
This week brings key earnings reports from Nvidia (NVDA), Target (TGT), Walmart (WMT), and Home Depot (HD), which will provide further insight into both AI demand and consumer spending trends. Amazon's guidance for current-quarter revenue of $194 billion to $199 billion exceeds the analyst consensus of $188.9 billion tracked by LSEG, but the company faces potential headwinds from rising interest rates and legal risks.
The consumer lawsuit, filed Friday, seeks refunds for what plaintiffs claim were hundreds of millions in additional charges tied to tariffs that the Supreme Court deemed unlawful. Amazon did not respond to Reuters' request for comment. Legal analysts note that the case could expand, adding political and regulatory noise to Amazon's outlook.
As Amazon heads into Monday, investors are weighing strong AWS growth against heavy capex, Berkshire's exit, and legal uncertainty. Early trading will reveal whether the market is willing to look past these near-term pressures or if the selling will continue.
